The 6th U.S. Circuit Court of Appeals has ruled that certain types of ERISA claims, while brought by individual participants, ultimately belong to the plan as a whole, meaning individual arbitration agreements cannot as a matter of course prevent such claims from proceeding in court.
A three-judge panel concluded that a precedent-setting appellate decision which held that ERISA claims are not arbitrable is “no longer good law” in light of interim Supreme Court rulings.
Plaintiffs' claims over retirement plan investment and administration fees against the University of Southern California may now proceed.
The question before the high court is, “Whether an agreement to arbitrate ‘all claims’ that an ERISA plan participant ‘may have’ against a plan fiduciary encompasses a breach-of-fiduciary-duty claim under ERISA § 502(a)(2).”
The appellate court upheld a district court’s denial of defendants’ motion to compel arbitration, concluding that the dispute fell outside the scope of the arbitration agreements because the claims were brought on behalf of the ERISA plans, not the individuals.